This means in practice that from 1 April 2016 any Standard Security granted over a title which is at that time still registered in the Sasine Register will trigger a first registration of that title in the Land Register of Scotland. The concession is that the registration dues for that first registration will be removed altogether, with the dues being payable on the Standard Security only (currently a flat rate of £60). However, the legal costs involved in preparing the title for first registration will remain.
The biggest impact of this change is likely to be for mortgage lenders who currently offer fees free or fees assisted remortgage schemes. These schemes are generally run on the basis that the borrower is not legally represented, and the lender's solicitors will complete the legal work involved in order to both (1) redeem and discharge the outgoing lender's security, and (2) register a first ranking security for the incoming lender. It remains to be seen whether the compulsory registration of a borrower's Sasine title will require the borrower to instruct a solicitor to act for them, thereby incurring additional legal cost. The alternative may be a situation where the lender's solicitor applies to register the title at the same time as the incoming lender's security. However, it is open to question whether law firms on lenders' remortgage panels will wish to get involved in this sort of arrangement - though they may not be given the choice if they wish to remain on the panel.
For the avoidance of doubt, the Order is not relevant where the borrower's title to the property which is subject to the Standard Security is already registered in the Land Register.
Voluntary registration changes
Another change being brought in on 1 April 2016 is the repeal of the right of the Keeper of the Land Register of Scotland to refuse to accept an application for voluntary registration. This is in keeping with the plans of the Scottish Ministers to encourage voluntary registration of the remaining Sasine titles. In addition, there will be a welcome 25% reduction in the registration dues chargeable on a first registration in the Land Register - effective from 30 June 2015.
For those land owners considering voluntary registration who can afford to wait until 1 April 2016, it may be possible to avoid the registration dues for the voluntary registration altogether by registering a Standard Security over the Sasine title at the same time.
If you have any questions about voluntary registration information, or would like further information on the closure of the Sasine Register to new Standard Securities, please contact us on the details below.